Chelsea leasehold conveyancing: Q and A’s
There are only 68 years unexpired on my flat in Chelsea. I am keen to get lease extension but my freeholder is can not be found. What should I do?
If you qualify, under the Leasehold Reform, Housing and Urban Development Act 1993 you can submit an application to the County Court for for permission to dispense with the service of the initial notice. This will mean that your lease can be extended by the Court. You will be obliged to demonstrate that you or your lawyers have used your best endeavours to track down the lessor. On the whole an enquiry agent may be useful to carry out a search and prepare a report to be used as proof that the freeholder is indeed missing. It is wise to seek advice from a solicitor both on devolving into the landlord’s disappearance and the application to the County Court covering Chelsea.
I am tempted by the attractive purchase price for a two flats in Chelsea both have about 50 years unexpired on the leases. Should I regard a short lease as a deal breaker?
There is no doubt about it. A leasehold apartment in Chelsea is a wasting asset as a result of the shortening lease. The closer the lease gets to zero years unexpired, the more it adversely affects the marketability of the property. For most purchasers and mortgage companies, leases with less than eighty years become less and less attractive. On a more positive note, leaseholders can extend their leases by serving a Section 42 Notice. One stipulation is that they must have owned the premises for two years (unlike a Section 13 notice for purchasing the freehold, when leaseholders can participate from day one of ownership). When successful, they will have the right to an extension of 90 years to the current term and ground rent is effectively reduced to zero. Before moving forward with a purchase of a residence with a short lease term remaining you should talk to a solicitor specialising in lease extensions and leasehold enfranchisement. We are are happy to put you in touch with Chelsea conveyancing experts who will explain the options available to you during an initial telephone conversation free of charge. A more straightforward and quicker method of extending would be to contact your landlord directly and sound him out on the prospect of extending the lease You may find he or she is happy to negotiate informally and willing to consider your offer straight off, without having to involve anyone else. This will save you time and money and it could help you reach a lower price on the lease. You need to ensure that any new terms represent good long-term value compared with the standard benefits of the Section 42 Notice and that onerous clauses are not inserted into any redrafting of the lease.
I am employed by a reputable estate agency in Chelsea where we have witnessed a few flat sales put at risk as a result of short leases. I have been given conflicting advice from local Chelsea conveyancing firms. Could you confirm whether the vendor of a flat can commence the lease extension process for the buyer?
Provided that the seller has been the owner for at least 2 years it is possible, to serve a Section 42 notice to commence the lease extension process and assign the benefit of the notice to the purchaser. This means that the buyer need not have to sit tight for 2 years to extend their lease. Both sets of lawyers will agree to form of assignment. The assignment has to be done before, or simultaneously with completion of the disposal of the property.
Alternatively, it may be possible to agree the lease extension with the freeholder either before or after the sale. If you are informally negotiating there are no rules and so you cannot insist on the landlord agreeing to grant an extension or transferring the benefit of an agreement to the purchaser.
We expect to complete the sale of our £400000 flat in Chelsea next week. The managing agents has quoted £408 for Certificate of Compliance, building insurance schedule and previous years service charge statements. Is it legal for a freeholder to charge an administration fee for a flat conveyance in Chelsea?
For the majority of leasehold sales in Chelsea conveyancing will involve, queries regarding the management of a building inevitably needing to be answered directly by the freeholder or its agent, this includes :
- Addressing conveyancing due diligence questions
- Where consent is required before sale in Chelsea
- Supplying insurance information
- Deeds of covenant upon sale
- Registering of the assignment of the change of lessee after a sale
Following months of correspondence we are unable to agree with our landlord on how much the lease extension should cost for our flat in Chelsea. Does the Leasehold Valuation Tribunal have jurisdiction to calculate the appropriate figures?
in cases where there is a absentee freeholder or where there is disagreement about the premium for a lease extension, under the relevant statutes you can apply to the Leasehold Valuation Tribunal to determine the price payable.
An example of a Lease Extension decision for a Chelsea property is 150A Albert Palace Mansions Lurline Gardens in July 2013. The Tribunal determined that the premium payable for the new lease of the subject property was £42,069 This case was in relation to 1 flat. The the unexpired residue of the current lease was 57.06 years.
When it comes to leasehold conveyancing in Chelsea what are the most common lease defects?
There is nothing unique about leasehold conveyancing in Chelsea. Most leases is drafted differently and legal mistakes in the legal wording can sometimes mean that certain clauses are wrong. For example, if your lease is missing any of the following, it could be defective:
- A provision to repair to or maintain elements of the property
- Insurance obligations
- Clauses dealing with recovering service charges for expenditure on the building or common parts.
- Service charge per centages that don't add up correctly leaving a shortfall
A defective lease will likely cause problems when trying to sell a property primarily because it impacts on the ability to obtain a mortgage on the property. Yorkshire Building Society, Virgin Money, and Bank of Ireland all have express conveyancing instructions when it comes to what is expected in a lease. Where a lender has been advised by their lawyers that the lease is problematic they may refuse to grant the mortgage, forcing the purchaser to pull out.